-Refer to the Figure Above to Answer This Question

question 100

Multiple Choice

-Refer to the figure above to answer this question.If government spending is G₁ and GDP is Y₁,why won't a reduction in government spending by the size of the budget deficit eliminate the deficit?

• A)Because GDP and NTR will decrease as a result of the decrease in government spending.
• B)Because government spending is a function of income.
• C)Because GDP will rise as a result of the decrease in government spending.
• D)Because NTR will rise as a result of the decrease in government spending.

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Definitions:

Philanthropist

An individual who seeks to promote the welfare of others, especially by donating large sums of money to charitable causes.

Public School

An educational institution that is funded and operated by the government, offering free education to students.

Highly Profitable

Describes businesses or investments that generate earnings substantially above the average, relative to their size or compared to their industry peers.

New Venture Creation

The process of developing, planning, and launching a new business enterprise.